Fixes #43922

src/vs/editor/common/diff/diffComputer.ts

@@ -284,7 +284,7 @@ class LineChange implements ILineChange {
 			const originalCharSequence = originalLineSequence.getCharSequence(diffChange.originalStart, diffChange.originalStart + diffChange.originalLength - 1);
 			const modifiedCharSequence = modifiedLineSequence.getCharSequence(diffChange.modifiedStart, diffChange.modifiedStart + diffChange.modifiedLength - 1);
 
-			let rawChanges = computeDiff(originalCharSequence, modifiedCharSequence, continueProcessingPredicate, false);
+			let rawChanges = computeDiff(originalCharSequence, modifiedCharSequence, continueProcessingPredicate, true);
 
 			if (shouldPostProcessCharChanges) {
 				rawChanges = postProcessCharChanges(rawChanges);

src/vs/editor/test/common/diff/diffComputer.test.ts

@@ -673,4 +673,23 @@ suite('Editor Diff - DiffComputer', () => {
 		];
 		assertDiff(original, modified, expected, true, false);
 	});
+
+	test('issue #43922', () => {
+		let original = [
+			' * `yarn [install]` -- Install project NPM dependencies. This is automatically done when you first create the project. You should only need to run this if you add dependencies in `package.json`.',
+		];
+		let modified = [
+			'  * `yarn` -- Install project NPM dependencies. You should only need to run this if you add dependencies in `package.json`.',
+		];
+		var expected = [
+			createLineChange(
+				1, 1, 1, 1,
+				[
+					createCharChange(1, 9, 1, 19, 0, 0, 0, 0),
+					createCharChange(1, 58, 1, 120, 0, 0, 0, 0),
+				]
+			)
+		];
+		assertDiff(original, modified, expected, true, false);
+	});
 });